Verizon and Coinstar executives said little about the joint venture on a conference call Monday, noting that they will unveil details on their strategy during the second half of 2012. But the Coinstar filing would appear to confirm that Verizon hopes to use Internet video distribution to expand outside the footprint where it offers FiOS TV services.

But Verizon faces several challenges in becoming a virtual MSO, including obtaining rights from major programmers to distribute their programming via the Web. While the telco already allows its FiOS TV subscribers to purchase content for viewing on multiple platforms via its Flex View service, it offers a limited number of movie titles through Flex View.

Verizon will own 65 percent of the joint venture with Redbox. The company may also be able to use Redbox kiosks to market its FiOS products.

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